How Energy Efficient Regulations Can Save You Money
A recent study conducted by the Lawrence Berkeley National Laboratory and supported by the U.S. Department of Energy’s Advanced Manufacturing Office found that electric motors consume nearly one-third of all electricity in the United States. They inventoried all three-phase AC and DC motors greater than 1 horsepower in commercial and industrial equipment including fans, blowers, air compressors, refrigeration, and material conveying and found that there are nearly 53 million of these motor systems in the U.S. today. Of these motor systems, more than 41 million are found in commercial facilities including hospitals, universities, restaurants, retail, and hotels. These motors account for 26% of overall energy consumption.
With so many electric motors in use, finding ways to reduce energy consumption and improve efficiency is important. In recent years, we’ve seen the government create energy efficiency standards and rebate programs to support this focus on efficiency. Taking steps to make your building more efficient can drastically lower operating costs.
Two important pieces of legislation relating to commercial building energy efficiency are the Consolidated Appropriations Act of 2021 and the Energy Act of 2020.
Consolidated Appropriations Act of 2021, Section 179D
Section 179D of the Consolidated Appropriations Act provides a tax deduction for Energy Efficiency improvements to commercial office buildings of $1.80 per square foot. Commercial building owners or designers must demonstrate a 50% reduction in energy usage with improvements to the building systems including heating, cooling, ventilation, hot water, and lighting. Improvements that don’t reach the 50% reduction can still qualify for partial deductions up to $.60 per square foot.
For a 100,000 sf commercial building, this tax credit can add up very quickly and, in many cases, the payback would pay for the upgrade of your electric motors and fan blades. For example, you could retrofit an ECM motor (variable speed motor) and better fan blades, or you could choose a fan motor assembly (ECM and fan combination). For a rooftop AC unit, by running low stage AC instead of running it at either 100% or off, you can vary the speed and take it down to a lower percentage. This can save 25% efficiency. Or when you want to use ambient air, you can stop running the compressor that pulls a lot of energy, and can pull outside air, allowing a gain of 40-50% efficiency by reducing the speed of the blower motor.
Energy Act of 2020, Section 1005
Section 1005 of the Energy Act of 2020 directs the Secretary of Energy to establish a rebate program to encourage replacement of inefficient electric motors 1 horsepower or larger. The section defines a motor, electronic control, and extended product system. Requirements include variable speed or multispeed operation, partial load control that reduces input energy requirements, has greater than one horsepower, and uses extended product system technology. Both the minimum base level of efficiency and “extended product system” are still to be set by the Secretary of Energy within six months of the enactment of the bill.
Qualified extended product systems include commercial or industrial machinery or equipment that:
- Include electric motor and electronic control
- Reduce the input energy (as measured in kw-hours) by no less than 5 percent as compared to base levels to be set by secretary
- Incorporates system that has greater than 1 horsepower into redesigned machinery or equipment
- Did not make use of extended product system prior to the redesigned as described/defined by the secretary
- Was in service prior to and was placed back into service during calendar year 2021 or 2022
The rebate amount is determined by multiplying the sum of the nameplate rated horsepower (qualified motor and electronic control) and $25. The maximum rebate amount per qualified entity cannot exceed $25,000 per calendar year and the total appropriation is $5,000,000 per fiscal year 2022 and 2023.
With the available tax credits and rebates, now is a great time to consider a replacement motor strategy or retrofit energy efficiency improvements for your business. Regal’s Marathon® SyMAX-i® line offers direct drop-in replacements to deliver enhanced savings in your air moving operations. For more information on the SyMAX line and Marathon distributors in your area, visit our Where to Buy section below!